Regulators in South Korea
Regulatory Environment — South Korea
Our reporting solution for South Korea is designed to satisfy the reporting requirements of the Financial Supervisory Service (FSS), South Korea’s integrated financial regulator.
Balance sheet reporting
Balance sheet reporting provides information on the financial position of a bank and is required by the FSS on a monthly and quarterly basis. Under this type of reporting all the banks in South Korea are required to submit the reports on assets and liabilities in South Korea as well as all the supplementary information.
Profit and loss reporting
Capital adequacy reporting
Foreign currency position reporting
Loans and advances and provisions reporting
External position reporting
Derivative transaction reporting
Firms are faced with investing time, effort and resource to:
So how can we help you?
Wolters Kluwer Financial Services provides regulatory reporting solutions throughout the world for banks, insurance companies, and other financial institutions. By leveraging a global data model (DataFoundation), a standardised integral development environment, fully integrated calculation capabilities and a global runtime engine for reporting, we can provide local reporting efficiently consistently for any jurisdiction.
The main benefits of the our regulatory reporting solution include:
As leaders in the field of risk and regulatory solutions Wolters Kluwer Financial Services understands your business needs. Our heritage in and in-depth knowledge of the financial market enables the development of our solutions to be so flexible that they meet the needs of ALL firms whatever the size or complexity.
Wolters Kluwer Financial Services provides full coverage to all banks legally bound to report to the Bank of Korea and Financial Supervisory Service.
Asset & Liability Management (ALM)
ALM is being embraced as more than just a tool to monitor and manage interest rate risk in the banking book. It is a process for managing balance sheets against other risks that affect earnings and portfolio valuations of banks, shifts in customer behavior, future balance sheet growth, and impact of business strategies (pricing, hedging, growth, and planning).
In light of the financial crisis, firms of all shapes and sizes are re-evaluating their ALM model. In order to earn an adequate return, the need to assess and mitigate the adverse value and income impact of changes in the market has become even more vital.
So how do different types of financial institutions manage their ALM requirements today?
Large, tier one firms typically develop their ALM systems in-house, a luxury few smaller firms can’t afford. These systems typically include sophisticated and finely tuned functionality for value exposure, value-at-risk, dynamic simulation, earnings-at-risk, and treasury view.
In the past, smaller firms have found solutions for meeting ALM requirements to be over-complicated, difficult to integrate with incumbent systems, resource-dependent and cost-prohibitive. For these reasons they have resorted to using alternative methods such as spreadsheets or independent consultants, neither of which is ideal.
Until now the sheer cost of developing and supporting an in-house ALM system has been restrictive to smaller firms but the need to have accurate visibility into the future position of the firm is critical.
Our heritage and in-depth knowledge of the market have enabled the configuration of our solution to be so flexible that it meets the needs of ALL firms; from those with highly complex derivatives to those with a vanilla approach.
Our ALM solution provides a comprehensive range of capabilities covering the following areas:
And for the smaller firm
Our rich ALM solution offers functionality that delivers immediate return on investment by taking a ‘compact’ approach with risk management features that absorb complexity. Along with evaluating a mismatch between assets and liabilities, our ALM solution also manages risks arising due to liquidity and interest rate in banking books.
With our ALM solution firms can:
The 6-step process for ALM
Embracing advanced Basel II approaches and capital management practices
While some countries in Asia-Pacific and Japan were initially content with implementing basic and standardised approaches to Basel II, the trend towards more complex approaches to credit risk and market risk management have evolved as the Basel Committee on Banking Supervision has continued to enhance its guidance for more sophisticated approaches to managing market, credit, and operational risk.
The FRSGlobal solution provides a sophisticated Basel II module with the ability to calculate the capital charge for market and credit risk as required under Pillar 1. For Pillar 2, interest rate risk in the banking book, liquidity risk and concentration risk are covered. DataFoundation enables the reporting requirements set out in Pillar 3. The Basel II compliance can be used as an independent stand alone solution or in combination with all the other FRSGlobal RiskPro and RegPro modules.
Adoption of the IFRS7 and IAS 32, 39
Employ dynamic ALM for better balance sheet management
Several Asian Countries: Malaysia, Indonesia, Thailand and South Korea have introduced adoption plans for member banks to comply with international accounting treatments (or slight variations of them). The standards include information on how to value, categorise and account for financial instruments. In addition, the standard gives details of the accounting treatment for positions that qualify for hedge accounting. As these standards continue to evolve, it is incumbent that banks have a process in place to keep up with the latest developments.
The FRSGlobal IFRS solution is made up of both RiskPro and RegPro elements. FRSGlobal RiskPro enables the classification of financial instruments and the calculation of the valuation using either fair value or amortised cost as appropriate. RiskPro also supports several methods for testing and estimating impairment as required by IAS 39.
FRSGlobal RegPro uses ReportGenerator to produce standard IFRS report definitions with country adaptations as well as ReportBuilder to build additional standardised reports.
Read more about the IFRS solution here.
Liquidity Risk Management
Banks are interested in going beyond simple static financial ratios and gap reports as the measures of their liquidity risk. Since the Basel Committee on Banking Supervision issued its final paper on ‘Principles for Sound Liquidity Risk Management and Supervision’ banks have been adopting liquidity stress testing scenarios to simulate bank-specific and system risks to their balance sheet. By modelling their liquidity contingency plans against such scenarios, a measure of the bank’s cash-flow survival horizon can be derived, giving a statement of the effectiveness of the bank’s plan against such crisis.